Entergy announces Yankee will shut down in late 2014

BRATTLEBORO -- In a surprise announcement that went out by Twitter
just before 9 a.m. on Tuesday, Entergy announced it would be shutting
down Vermont Yankee Nuclear power plant sometime in late 2014.

"Today is an extremely tough day for us here at Entergy, and more
importantly for the 630 employees at Vermont Yankee," said Bill Mohl,
the president of Entergy Wholesale Commodities, during a press
conference at Entergy headquarters on Old Ferry Road in Brattleboro
Tuesday afternoon. "Earlier this morning we told these men and women
that Vermont Yankee nuclear power station will stop operating at the
end of its current fuel cycle and move into the decommissioning
process in the fourth quarter of 2014. The exact date is still to be
determined."

The decision to close the plant was made during a board of directors
meetings on Sunday night, said Mohl, and the decision was "an
extremely tough call for all of us."

"I can personally tell you that this was an agonizing decision," said
Mohl, especially when the board had to consider the fate of the more
than 600 employees at the plant.

"We recognize that closing the plant on this schedule was not the
outcome they had hoped for but we have reluctantly concluded that it
is the appropriate action for us to take under the circumstances."

Mohl said the decision to stop producing power at the plant was based
on the economics of the plant, and not operational performance,
litigation risks or political pressure.

"Simply put, the plant costs exceed the plant's revenues and this
asset is not financially viable. Despite its excellent track record,
Vermont Yankee is a single, small-unit nuclear station operating in
a very challenging marketing environment."

Mohl said the decision to close Yankee in the fourth quarter of 2014
was based on a number of factors.

First and foremost, he said, are the natural gas markets that have
undergone a transformational shift in supply due to the impacts of
shale gas resulting in sustained low natural gas prices and wholesale
energy prices.

Second, he said, the plant has a high-cost structure as a single-unit
plant.

"Since 2002, we have invested more than $400 million in the safe and
reliable operation of this facility. In addition, the financial
impact of cumulative regulations is especially challenging to a plant
in these market conditions."

The third factor was what he called "wholesale market design flaws
(that) continue to result in artificially low energy and capacity
prices in the region and do not provide adequate compensation to
merchant nuclear plants."

While energy producers such as Entergy and ISO New England, the
regional grid operator, are developing a strategy to identify and
gain support for potential market solutions that could receive
approval from the Federal Energy Regulatory Commission, said Mohl,

"Resolution of these issues is not certain and will take a
significant amount of time."

Mohl said a number of months ago, Entergy began "an intense
evaluation" of Vermont Yankee's financial viability, but did not go
into the process with the goal of shutting down the plant.

"We are constantly evaluating our portfolio of assets and businesses
to determine if it makes sense to hold and optimize, to sell or to
shutdown," said Mohl.

Even with the realization that continued operation wasn't financially
viable, he said, the management team had a number of other
discussions about the plant's future.

"We considered very carefully the effect of this decision on our four
stakeholder groups: our owners, our employees, our customers and our
communities. While extremely tough for many, we are confident the
decision is ultimately the right one. For our employees, it provides
them with the best opportunity to properly plan their future, whether
at the plant, at other Entergy-owned facilities or the broader
industry."

Despite the decision to close Yankee, said Mohl, Entergy remains
committed to nuclear power as an important part of its portfolio
because no other power source can provide a reliable and sustainable
source of electricity that is carbon free, reliable and "around the
clock."

"I especially want to recognize our employees at Vermont Yankee. They
are an amazing group of professionals who have done everything we've
asked including running this plant safely and reliably and also
establishing this plant as one of the best places to work in the
entire state of Vermont," said Mohl. "They generated electricity
safely and reliably day after day and year after year and we are
extremely proud of them. We absolutely will treat them fairly and
assist them through this difficult transition. We believe an orderly
shutdown decision provides our employees the best opportunity to
properly plan their future. We will also insure the plant is properly
staffed and safely operated until it is shutdown and ultimately
decommissioned."

Mohl thanked the many supporters "who have stood by us and our
employees for so many years. We hope they understand the economics
were too challenging to keep the plant operating in the future."

Jeff Forbes, Entergy's chief nuclear officer, said the primary focus
over the next year will be to operate the plant safely and reliably.
"Safety will be a top priority as we move into the shutdown and
decommissioning process," said Forbes.

He noted that over the past 10 years, Yankee has achieved a capacity
factor of 92.4 percent and had operated the plant "breaker to
breaker" for 496 days in between refueling outages.

He credited the employees of Yankee for that distinction, noting they
are a "dedicated and resilient group of men and women."

"This team has shown us ... no matter what is going on, they safely
and reliably generate the electricity that powers life," said Forbes.

Bob Audette can be reached at raudette@reformer.com, or at
802-254-2311, ext. 160. Follow Bob on Twitter @audette.reformer.

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